A. General
A.1. Description of the Group
Česká pojišťovna a.s. (“Česká pojišťovna”, “ČP”, “the Company” or “the Parent Company”) is a composite insurer offering a wide range of life and non-life insurance products and is domiciled in the Czech Republic. The Company was incorporated on 1 May 1992, as a joint stock company and is the successor to the former state-owned insurance company Česká státní pojišťovna.
The consolidated financial statements of the Parent Company for the year ended 31 December 2007 comprise the Parent Company and its subsidiaries (together referred to as the “Group”).
See Section C. of these financial statements for a listing of significant Group entities and changes to the Group in 2007 and 2006.
Structure of Shareholders
100 % share of ČP is owned by CZI_Holdings N.V., a holding company domiciled in the Netherlands, which was established by PPF Group N.V. to manage its insurance activities.
As of 31 December 2007 the PPF Group N.V. is the ultimate parent of the Company (see section G.1. for more information). PPF Group N.V. financial statements are publicly available on www.ppf.cz.
Registered Office:
Spálená 75/16 113 04 Prague 1 Czech Republic ID number: 45 27 29 56
The Directors authorised the financial statements for issue on 28 February 2008.
A.2. Statutory Bodies of the Parent Company
The Board of Directors as at the Balance Sheet Date:Chairman: Ladislav Bartoníček, Prague Vice Chairman: Marcel Dostal, Prague
Eilard Friese, Prague Members: Ivan Vodička, Prague
Jan Ježdík, Liberec
On 31 May 2007 Milan Maděryč, Jiří Šmejc and Ladislav Chvátal resigned from their positions. The newly elected members are Eilard Friese and Marcel Dostal, with their memberships commencing on 1 June 2007. Eilard Friese accepted the position of Vice Chairman of the Board of Directors on 12 June 2007. Marcel Dostal accepted the position of Vice Chairman of the Board of Directors on 10 December 2007. Ivan Vodička was elected as the fifth member of the Board of Directors, with his membership commencing on 1 October 2007.
On 31 January 2007 Ivan Kočárník resigned as Chairman and member of the Supervisory Board. The newly elected member
is Milan Maděryč, with his membership commencing on 1 June 2007. He accepted the position of Chairman of the Supervisory Board on the same date.
A.3. Statement of Compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations as adopted by the International Accounting Standards Board (IASB) and the European Union (EU) in accordance with the IAS Regulation (EC 1606/2002). None were adopted prior to their effective date.
The management has reviewed those standards and interpretations adopted by the EU at the date of issue of the financial statements which were not effective at that date. An assessment of the expected impact of these standards and interpretations on the Company is shown in note D.3.
A.4. Basis of Preparation
The Czech accounting legislation requires the Group to prepare these consolidated financial statements in accordance with IFRS (as adopted by EU – see note A.3.).
The financial statements are presented in Czech Crowns (“CZK”), rounded to the nearest million.
The financial statements have been prepared on a historic cost basis, except for the following assets and liabilities which are stated at their fair value: derivative financial instruments, financial instruments held for trading, financial instruments designated upon initial recognition as valued at fair value through profit and loss, financial instruments classified as available-for-sale and investment properties. Financial assets and liabilities and non-financial assets and liabilities which are valued at historic cost are stated at amortised cost or historic cost,
as appropriate, net of any relevant impairment.
Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell.
The preparation of the financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historic experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of the judgments about the carrying values of assets and liabilities that cannot readily be determined from other sources. The actual values may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in both the period of the revision and future periods if the revision affects both the current and future periods.
Judgments made by management in the application of IFRSs that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next period are discussed in note D.5. with respect to insurance specific considerations and note F.40. for other considerations.
Except for the exception described in note D.2. in respect of investment contracts with DPF the accounting policies have been consistently applied by the Group entities and are consistent with those used in the previous year.